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Portugal's debt plight worsens after govt quits

Portugal's debt plight worsens after govt quits

March 24th, 2011 in News

LISBON, Portugal (AP) - Portugal's financial problems are worsening and pushing the debt-heavy country closer towards needing a bailout a day after the government resigned.

The interest rate on Portugal's 10-year bonds rose to a euro-era record of 7.71 percent Thursday - a level that is unsustainable and could force the country to ask for help like Greece and Ireland did previously.

Portugal's borrowing costs have risen steadily over the past year as investors demand a high return for the risk of granting it loans.

The government quit late Wednesday after opposition parties rejected its latest debt-reduction plan. Elections are expected by June.

The turmoil comes as Europe's leaders gather in Brussels for a summit where they aim to reassure markets about the soundness of the 17-nation eurozone.